President Joe Biden’s pick to be the nation’s top banking cop came under fire from Senators on Thursday for alleged influence peddling.
Sarah Bloom Raskin, a Duke University law professor and former deputy secretary of the Treasury, was nominated on Jan. 14 to be vice chair of supervision for the Federal Reserve Board of Governors. Republicans on the Senate Banking Commitee inquired into whether Bloom Raskin leveraged insider connections to help fintech firm Reserve Trust, on whose board she previously sat, obtain a ‘master license.’
“A Fed master account gives Reserve Trust an enormous advantage over everybody else since it appears they’re the only one who has it,” said Republican Wyoming Sen. Cynthia Lummis. “Something doesn’t smell right with the way this played out … they purchased your shares for almost $1.5 million. Even in this town that’s a lot of money,”
Currently there is only one non-bank fintech company in the country with a Federal Reserve master account. That company was initially denied an account, but a year after Sarah Bloom Raskin joined the company’s board, the company was granted it. This raises a lot of questions. pic.twitter.com/o0aNJXq5Hy
— Senator Cynthia Lummis (@SenLummis) February 3, 2022
“Certainly, if you are suggesting anything improper, I want to make very clear that I have, first of all, had the honor to serve in various public capacities & each time I have left I have been very mindful of the rules regarding departure,” responded Bloom Raskin, according to Politico’s Victoria Guida.
“After watching video of the entire exchange between Sen. Lummis and nominee Raskin, the probability I assign to Raskin being innocent has declined,” wrote Lawrence H. White, an economics professor at George Mason University. (RELATED: Chamber Of Commerce Signals Opposition To Latest Biden Fed Nominee Sarah Bloom Raskin)
Following Thursday’s hearing, ranking member of the Senate Banking Committee Republican Pennsylvania Sen. Pat Toomey released a letter to Kansas City Fed President Esther George, asking for all meetings, phone calls, emails and text messages involving the decision to grant Reserve Trust its master license, The Hill reported. “It remains puzzling how Reserve Trust obtained this account when other institutions have been denied access, leading one bank to file a lawsuit against the Federal Reserve Bank of New York over the issue,” Toomey reportedly wrote.
The Senate Banking Committee will convene to vote on Bloom Raskin’s nomination and those of four others to lead the central bank on Feb. 15. Democratic New York Sen. Chuck Schumer has said that the Senate will then “move quickly” for a full floor vote on the matter.
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